Annual Budget

Transcription

1 Annual

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3 Annual Thursday, 23 June, 2016 TABLE of CONTENTS Introduction Page Mayor's Introduction 4 Elected Members and Executive Leadership Team 5 Certification 6 Our City 7 Consultation and Engagement 8 Our Planning Framework 9 Vision 10 Our Core Services 10 Service Delivery 10 Executive Summary 11 Financial Summaries Statement of Comprehensive by Nature and Type 21 Statement of Comprehensive by Program 23 Rate Setting Statement 25 Statement of Net Current Assets 27 Statement of Financial Position 29 Statement of Cash Flows 31 Cash Back Reserves 33 Projects Funded from Reserves 40 Page 3 of 42

4 Thursday, 23 June, 2016 Annual Mayor's introduction to the I have great pleasure in commending the budget to you. The Council believes a 3% rate increase in today's enconomic climate balances the continuing increase in service delivery costs and community expectations with the financial capacity of our ratepayers. We acknowledge that asset maintenance and replacement is an ongoing requirement and have allocated $9.6 million for renewal of community assets. Our loan borrowings are expected to increase by $3 million in to fund initial refurbishment works on our new depot site. Further loan borrowings will be required in 2017/18 to complete these works. Investment enquiries have increased over the past year and the City has an unprecidented pipeline of private sector investment projects. We are entering another exciting period in the City's development and growth and the projects included in this budget will underpin the achievement of our Strategic Community Plan objectives. I commend the Elected Members and City Officers who have embraced the need for a disciplined approach to shaping our budget. Regards Dr Brad Pettitt Mayor Page 4 of 42

5 Thursday, 23 June, 2016 Annual Elected Members and Executive Leadership Team THE MAYOR Dr Brad Pettitt Councillors Cr Dave Coggin (Deputy Mayor) Cr Dave Hume Cr Rachael Pemberton Cr Simon Nader Cr Jon Strachan Cr Bryn Jones Cr Doug Thompson Cr Andrew Sullivan Cr Sam Wainwright Cr Ingrid Waltham Cr Jeff McDonald CHIEF EXECUTIVE OFFICER Philip St John DIRECTOR CITY BUSINESS Dougall Glen Dougal DIRECTOR COMMUNITY DEVELOPMENT Marisa Spaziani DIRECTOR STRATEGIC PLANNING AND PROJECTS Paul Trottman Trotman DIRECTOR INFRASTRUCTURE AND PROJECT DELIVERY Lionel Nicholson (Acting) Page 5 of 42

6 Thursday, 23 June, 2016 Annual Certification THE CITY OF FREMANTLE COMPILED THE ANNUAL BUDGET ACCORDING TO SECTION 6.2 OF THE LOCAL GOVERNMENT ACT 1995 I hereby certify that the budget for the :a) Municipal Fund and the following Reserve Accounts Investment Reserve Heritage Places Reserve Parking Dividend Equalisation Reserve Parks Recreation and Facilities Reserve Fremantle Markets Conservation Reserve Renewable Energy Investment Reserve Leighton Precinct maintenance Reserve Leisure Centre Upgrade Reserve Fremantle Town Hall Refurbishment Reserve Cantonment Hill Master Plan Reserve Kings Square Improvements Reserve Home and Community Care Assets Replacement Reserve Stan Reilly Property Redevelopment Reserve b) Trust Funds City of Fremantle trust Account for the City of Fremantle for the financial year were adopted by the Council at a Special Meeting held on 30 June Dr B Pettitt Mayor P St John Chief Execuitive Executive Officer Page 6 of 42

7 Annual Thursday, 23 June, 2016 Our City Population Current population 31, 046 (Estimated ) Census official population 29, 471 (Census 2012) Population density persons per hectare Geographical Total area: Average Temperature: Average Rainfall : 19.90sq km. (CBD 5.5ha) Summer (Jan) C. Winter (Jul) C 775mm Community Schools: Primary 13 Secondary 4 Hospitals: 1, Fremantle Hospital Nursing Homes: 6 Tertiary Education institutions : University of Notre Dame Challenger Institute The City of Fremantle is a local government authority located 20km south of the Perth CBD comprising the suburbs of Beaconsfield, Fremantle, Hilton, North Fremantle, O Connor, Samson, South Fremantle and White Gum Valley. The Town of Fremantle Council was founded in 1871 and it wasn t until 1929 that it gained city status. Today, the City employs more than 450 people and services approximately 30,000 residents over a land area of 19 square kilometres. We pride ourselves on responsible social, economic and environmental management and in 2009, Fremantle became WA's first carbon neutral city. In September 2014, Fremantle became one of only two councils in Australia to achieve national One Planet certification for sustainability. The City also has a strong focus on arts and culture and owns and runs the iconic Fremantle Arts Centre and world-renowned festivals including Australia s oldest festival, the Fremantle Festival. Page 7 of 42

8 Annual Thursday, 23 June, 2016 Consultation and Engagement As a way of guiding the new strategic plan, corporate business plan and annual budget the City embarked on an extensive community visioning initiative aimed at getting to the core of community visions and values for Fremantle, now and into the future. The Fremantle 2029: Community Visioning Project was an innovative, professional and interactive community engagement exercise which involved a wide range of Fremantle people including those who are not normally engaged in the future of Fremantle. Close to 1,000 people attended five major workshops and three stakeholder forums during The visioning made the most of Fremantle s extraordinary local talent and knowledge among the presenters and the participants to reach a diverse group of stakeholders in the community. The interactive workshops enabled participants to have their say on key Fremantle issues and to be informed about the long-term strategic issues facing council. The issues most frequently mentioned by participants during the workshops included: slowing traffic and making the city better for pedestrians, cyclists and improving public transport supporting independent small business and the creative sector protecting and enhancing the natural environment, green spaces and heritage features of the city improving the connectivity around Fremantle, especially to the waterfront. This budget and future budgets will reflect the priorities identified through the engagement process "The future is not some place we are going but one we are creating" Council's strategic management planning documemts include: > Strategic Community Plan > Corporate Business Plan > Long Term Financial Plan > Workforce Plan Our Planning Framework The Strategic Community Plan contains a vision statement for the City and describes our objectives for each of our seven focus areas over the next ten years. The Corporate Business Plan outlines the strategies, activities and projects that will be delivered over the next four years to ensure Strategic Community Plan objectives are met. The following diagram depicts our planning framework and describes the linkages between all relevant planning documents Page 8 of 42

9 Annual Thursday, 23 June, 2016 Our Planning Framework - Continued Page 9 of 42

10 Annual Thursday, 23 June, 2016 Our Vision A city that is clever and creative, inspiring and inclusive. A city that welcomes and celebrates all people, all cultures. A city that encourages innovation, prosperity and achievement. A compassionate city that cares for the wellbeing of our people and the environment we share. A city that thrives on diversity, that dares to be different - and delivers on its promises. Our Core Services Council has developed a structured approach to the definaition of services as a key part of its stratgic and business planning framework. Key activities have been defined for each services and these have been used as a bisi for the development of the budget. The introduction of a new service model means that this budget document does not provide comparatives to this new level of detail. Service and activity budgets have been provided as an attachment to the main budget document Service Delivery It is proposed that existing service levels will be maintained for all operational activities in the short term, however our objectives defined in the City of Fremantle Strategic Community Plan aspire to maintain and selectively improve existing levels of service in the longer term whilst moving toward achieving annual operating surpluses to fund new and replacement infrastructure Page 10 of 42

11 Annual Thursday, 23 June, 2016 Executive Summary The Annual has been prepared in accordance with the requirements of the Local Governemnt Act 1995, relevant Australian Accounting Standards and the Local Government Financial Management Regulations. This budget is focussed on maintaining the level of services that our community continues to expect. Total budgeted expenditure for is $90.98 million. This comprises $18.7 million in capital works, $1.6 million for debt reduction and $70.68 million in operating expenditure (excluding depreciation). This budgeted expenditure is being funded from the following revenue sources $ million in general rates $ 32.6 million in other operating revenue (grants, fees and charges etc) $ 4.1 million in capital grants and contributions $ million in new loan borrowings $ million from the disposal of assets (transfered to Reserves) $ 6.7 million from surplus cash $ 6.5 million from reserves Highlights of how our community will benefit from this year's budget are outlined below. Some activies and projects are partially funded by grants or other external funding sources. Highlights - Operating Rate The proposed general rate and minimum rate in the dollar will increase by 3% for all properties on last year's rates. The minimum rate will increase from $1,222 in 2015/16 to $1,259 in. Total rate revenue will increase from $$40.78 million in 2015/16 to $42.49 million in. Rate revenue includes additional interim rate revenue of $0.31 million in. Details of rating information are provided within the Notes to and Forming Part of the. Fees and Charges Individual fees and charges have been generally increased by 3%. Total revenue from fees and charges will increase from $ million in 2015/16 to $ million in Details on individual fees and charges increases are provided with the Fees and Charges document that forms part of the Annual. Operating Grant Operating Grants from the State and Federal Governments for base operating activities will increase from $3.30 million in 2015/16 to $3.37 million in. Reimbursement Operating Grants Subsidies and Contributions includes an addition $0.92 million in tenant recoverable income not recognised in previous years. This is offset by the recognition of additional utility expenses included in the expenditure side of the budget in previous years. Page 11 of 42

12 Annual Thursday, 23 June, 2016 Highlights - Operating Projects Executive Summary - Continued Community Safety and Crime Prevention Initiatives Provision of an additional $50,000 to facilitate the expansion of community safety services. Tree Planting in Recreation Reserves $50,000 An increase in the parks and landscape base operating budget to enable the city to meet the objective of planting 1000 trees annually. Tree Planting in Road Reserves $20,000 An increase in the parks and landscape base operating budget to enable the city to meet the objective of planting 1000 trees annually. Foreshore and Natural Area Maintenance $35,000 An increase in the parks and landscape base operating budget to maintain foreshores and natural areas. Deliver in Cahoots Art Exhibition and New Residency $150,000 A residency and exhibition project presented by the Fremantle Arts Centre, in partnership with six leading Aboriginal Art Centres across Australia, funded by the Department of Culture and the Arts. Concept Design for Kings Square Public Realm $75,000 Preparation of a concept plan as part of the redevelopment of Kings Square Business Plan for Fremantle Oval Precinct Redevelopment $75,000 The development of a funding model and management plan for the redevelopment of Fremantle Oval. Library System Replacement $70,000 Replacement of our out-dated library system with a cloud based solution. Cantonment Hill Recreation Reserve Soft Landscaping $155,000 Carried forward works from 2015/16 Bike Plan Maintenance and Minor Works $55,000 Improvement of bike amenities Coastal Hazard Risk Management Plan $75,000 Preparation of a risk management plan for Leighton and Port beaches in partnership with other stakeholders. Beaconsfield West Master Plan $40,000 Preparation of technical reports to support the preparation of a local structure plan. Municipal Heritage Review $40,000 Undertake a review in high priority areas previously identified by Council. Concept Plans for Pocket Parks at Hilton and O'Connor $30,000 Prepartion of plans as outlined in the Green Plan Information Technology Server and Network Storage Infrastructure $150,000 Operating lease cost for the repalcement of equipment under existing lease agreements (no net increase in cost from previous lease arrangements) Page 12 of 42

13 Annual Thursday, 23 June, 2016 Highlights - Capital Projects Executive Summary - Continued Path and Cycleway Construction, Replacement and Maintenance $0.52 million The path and cycleway program will continue in for upgrading replacing and developing single and dual use paths throughout the city Construction of New Operations Centre $3.00 million The detailed design for the new operations centre will be completed during and initial physical works will commence on the refurbishment of the new depot site. Further funding will be allocated in the 2017/18 budget to complete this project Fremantle Town Hall Refurbishment $2.24 million Completion of external conservation works commenced in 2015/16 Cantonment Hill Naval Store Refurbishment $0.68 million Building refurbishment Landscaping Works Cantonment Hill $2.1 million Installation of paths, irrigation equipment, park furniture and soft landscaping Road Network Upgrade and Rehabilitation Works Projects to be undertaken to provide a safer and efficient road network include, construction of a new intersection at Marmion and Petra Streets, construction of a roundabout at the intersection of Watkins Street and Wiluna Ave, construction of new traffic calming measures, resurfacing Ord Street, upgrading the intersection of South Street and South Terrace and upgrading the intersection at Norfolk/Parry and South Terrace Way Finding and Signage $0.25 million The way finding and signage program will continue in Warders Cottage $0.80 million Provision for the acquisition of a Warders Cottage South Beach Basketball Court $0.20 million Construction of a new full sized basketball court Detailed Design for Fremantle Park $0.10 million Preparation of a detailed design to facilitate reconstruction of facilities Refurbish Fremantle Boys School $0.70 million Refurbishment of this building to facilitate use by various organisations CCTV Upgrade $0.175 million Provision to expand the number of cameras and connect to the police monitoring room Loan Borrowings This budget proposes to borrow $ million for the following projects: Project Refurbish Fremantle Boys School $ million Project Construct new operations centre $ million Project External conservation works to Fremantle Town Hall $ million Project Underground low volatge lines in South Terrace $ million Project Replace heavy vehicles $ million Project Replace light vehicles $ million Page 13 of 42

14 Annual Thursday, 23 June, 2016 Sources Dollars Sources Percentage Page 14 of 42

15 Annual Thursday, 23 June, 2016 Operating Costs Dollars Operating Costs Percentage Page 15 of 42

16 Annual Thursday, 23 June, 2016 Capital Dollars Capital Percentage Page 16 of 42

17 Annual Thursday, 23 June, 2016 Operating Operating Operating Surplus (Deficit) The operating deficit for will increase as a result of: Classifying soft landscaping works as operating expenditure instead of capital expenditure Changes to the way public works overheads have been allocated in previous years An increase in the value of operating projects to be undertaken in compared with 206/17 Page 17 of 42

18 Annual Thursday, 23 June, 2016 Capital Note: in 2014/15 includes $6.5 million for the purchase of a new operations depot site. Page 18 of 42

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20 Statement of Comprehensive by Nature and Type

21 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Revenue Rate Operating Grants Subsidies and Contributions Fees and Charges Service Charges Interest Other 40,262,727 4,748,186 24,861,240 1,554, ,292 40,777,481 4,343,370 25,115,966 1,837, ,542 42,486,764 5,015,250 25,525,100 1,834, ,550 71,624,490 72,300,043 75,101,709 Expenses Employee Expenses Materials and Contracts Expenses Utility Expenses Depreciation Expense Interest Expenses Insurance Expenses Other Expenses (36,987,338) (25,353,795) (1,720,066) (7,457,066) (806,768) (847,718) (2,003,704) (35,552,496) (25,962,098) (1,618,104) (7,191,244) (806,768) (776,023) (1,879,643) (37,417,109) (26,275,618) (2,318,765) (7,234,000) (685,000) (753,470) (3,233,869) (75,176,455) (73,786,376) (77,917,831) Operating Surplus (Deficit) (3,551,965) (1,486,333) (2,816,122) Non Operating Grants Subsidies and Contributions Non Operating Grants Subsidies and Contributions 4,161,531 2,286,834 4,109,287 4,161,531 2,286,834 4,109,287 Proceeds on Asset Disposal Proceeds on Asset Disposal - Land Proceeds on Asset Disposal - Buildings Proceeds on Asset Disposal - Fleet Proceeds on Asset Disposal - Other 31,420,000 1,010, , , ,973 23,912 30,850, , ,000 32,579, ,848 31,852,000 Value of Disposed Assets Value of Disposed Assets - Land Value of Disposed Assets - Buildings Value of Disposed Assets - Fleet Value of Disposed Assets - Other (25,890,000) (2,839,520) (149,202) (640,000) (405,641) (125,037) (10,314) (25,280,000) (850,000) (340,000) (28,878,722) (1,180,992) (26,470,000) Non Operating income and 7,862,409 1,801,690 9,491,287 NET RESULT 4,310, ,357 6,675,165 Change in Equity Change in Equity - Joint Venture Other Comprehensive TOTAL COMPREHENSIVE INCOME 4,310, ,357 6,675,165 Page 21 of 42

22 Statement of Comprehensive by Program

23 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Operating Revenue Governance General Purpose Funding Law Order Public Safety Health Education and Welfare Housing Community Amenities Recreation and Culture Transport Economic Services Other Property and Services Operating Governance General Purpose Funding Law Order Public Safety Health Education and Welfare Housing Community Amenities Recreation and Culture Transport Economic Services Other Property and Services Finance Costs Education and Welfare Recreation and Culture Transport Other Property and Services 199,338 43,042,710 2,238, ,650 1,964,504 1,780,718 6,823,552 11,021, ,840 3,552, ,830 43,271,468 2,457, ,276 1,515,961 3,104 1,742,680 7,246,942 11,176, ,588 3,589,385 66,050 45,637,858 2,407, ,100 1,536,900 2,148,600 7,954,781 11,328,000 1,152,450 2,323,470 71,624,490 72,300,043 75,101,709 (5,779,203) (1,071,902) (4,623,999) (830,200) (4,664,767) (52,727) (11,693,354) (19,958,947) (15,958,806) (2,827,959) (6,907,823) (5,703,981) (945,998) (4,311,625) (821,727) (4,048,503) (46,751) (11,451,499) (20,643,335) (15,045,312) (2,966,696) (6,994,181) (6,023,901) (999,056) (4,553,452) (867,815) (4,275,572) (49,373) (12,093,782) (21,801,162) (15,889,162) (3,133,090) (7,386,466) (74,369,687) (72,979,608) (77,072,831) (11,052) (16,324) (750,809) (28,583) (11,052) (16,324) (750,809) (28,583) (11,576) (17,098) (786,388) (29,938) (806,768) (806,768) (845,000) Operating Surplus (Deficit) (3,551,965) (1,486,333) (2,816,122) Non-Operating Grants Subsidies and Contributions Governance Law Order Public Safety Education and Welfare Recreation and Culture Transport Economic Services Other Property and Services (4,871) 115,229 1,390,336 9,758,068 (3,396,353) 9,091 (5,186) 4, ,775 1,447,756 40, ,000 20,000 2,272,000 1,262,287 50,000 5,712,000 7,862,409 1,801,690 9,491,287 Non Operating income and 7,862,409 1,801,690 9,491,287 Change in Equity Other Comprehensive TOTAL COMPREHENSIVE INCOME 4,310, ,357 6,675,165 Page 23 of 42

24 Rate Setting Statement

25 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Revenue from Operating Activities Service Charges (Underground Power) Operating Grants, Subsidies and Contributions 4,748,186 4,343,370 5,015,250 Fees and Charges 24,861,240 25,115,966 25,525,100 Interest Earnings 1,554,045 1,837,684 1,834,045 Other Revenue 198, , ,550 31,361,763 31,522,562 32,614,945 from Operating Activities Employee Costs (36,987,338) (35,552,496) (37,417,109) Materials and Contracts (25,353,795) (25,962,098) (26,275,618) Interest Expenses (806,768) (806,768) (685,000) Utility Charges (gas, electricity, water) (1,720,066) (1,618,104) (2,318,765) Insurance Expenses (847,718) (776,023) (753,470) Other (2,003,704) (1,873,342) (3,233,869) (67,719,389) (66,588,831) (70,683,831) Operating activities excluded from budget Fair Value Adjustments (6,301) Value of Assets Sold (28,878,722) (1,180,992) (26,470,000) Depreciation of non-current assets (7,457,066) (7,191,244) (7,234,000) (36,335,788) (8,378,537) (33,704,000) Non Current Movements Excluded Non Current Movements 16,325 16,325 Capital Revenue and Revenue from Capital Activities Capital Grants Subsidies and Contributions 4,161,531 2,286,834 4,109,287 4,161,531 2,286,834 4,109,287 on Capital Activities Acquisition of Assets (25,079,521) (11,567,899) (18,709,739) (25,079,521) (11,567,899) (18,709,739) Transfers to and from Reserves Transfers to Reserves (Restricted Assets) (33,292,421) (1,592,421) 33,570,760 Transfers from Reserves (Restricted Assets) 7,613,517 3,003,241 (6,487,800) (25,678,904) 1,410,820 27,082,960 Other Capital Funding Proceeds from Disposal of Assets 32,579, ,848 31,852,000 Proceeds from New Debentures 8,909,000 1,209,000 4,795,500 Repayment of Debentures (2,182,381) (1,571,238) Self-Supporting Loan Principal 211,333 54,168 41,488,600 (66,200) 35,130,430 deficiency before general rates (41,465,920) (43,002,714) (44,621,868) Net current assets at the start of the year surplus (deficit) Estimated amount to be raised from general rates Net current assets at the end of the year surplus (deficit) 3,563,186 4,344,012 2,135,104 (40,262,727) (40,777,481) (42,486,764) 2,359,993 2,135,104 0 Page 25 of 42

26 Statement of Net Current Assets

27 Annual Thursday, 23 June, 2016 City of Fremantle Statement of Net Current Assets Actual 204/15 Current Forecast 2015/16 Current Assets Cash - Unrestricted 1,528, , ,647 Cash and Cash Equivalents 1,528, , ,647 Investments - Unrestricted Investments - Restricted Investments - Other 16,841,054 25,834, ,961 11,435,871 9,816,247 24,423,203 51,506, , ,955 Investments 43,480,038 36,607,629 62,066,365 Receivables - Rates Receivables - Sundry Debtors Receivables - GST Receivables - Loans to Clubs and Institutions 264,154 1,297, , , , ,166 1,243,434 1,243, , ,005 54,168 0 Trade and Other Receivables 2,353,989 2,833,773 2,779,605 Inventory - Consumables Inventory - Goods for Sale 178, , , Inventories 178, , ,955 Total - Current Assets 47,540,859 40,272,040 65,679,572 Current Liabilities Sundry Creditors Received in Advance GST Payable (10,578,675) (274,157) (235,000) (7,052,407) (7,546,251) 0 0 (500,000) (500,000) Trade and Other Payables (11,087,833) (7,552,407) (8,046,251) Current Loan Borrowings (2,471,326) (1,571,238) (1,572,039) Current Portion of Long Term Borrowings (2,471,326) (1,571,238) (1,572,039) Current Prepaid Lease - Fremantle Markets Current Provision - Annual Leave (12,964) (6,050,693) (12,964) (12,964) (6,094,194) (6,114,194) Provisions (6,063,658) (6,107,158) (6,127,158) Total - Current Liabilities (19,622,817) (15,230,803) (15,745,448) Net Current Assets 27,918,042 25,041,237 49,934,124 Less Cash - Restricted Reserves (25,834,023) (24,423,203) (51,506,163) Less Receivables - Loans to Clubs and Institutions (211,333) (54,168) 0 Add Current Loan Borrowing 2,471,326 1,571,238 1,572,039 ESTIMATED SURPLUS (DEFICIENCY) C/FWD 4,344,012 2,135,104 0 Page 27 of 42

28 Statement of Financial Position

29 Annual Thursday, 23 June, 2016 Opening Balance 2015/16 Current Forecast 2015/16 Current Assets Cash and Cash Equivalents Investments Trade and Other Receivables Inventories 1,528, , ,647 43,480,038 36,607,629 62,066,365 2,353,989 2,833,773 2,779, , , ,955 Total - Current Assets 47,540,859 40,272,040 65,679,572 Non Current Assets Receivables - Non Current Investments - Non Current Property Plant and Equipment Investment Property Infrastructure Asset Disposal Clearing Capital Work In Progress 427, , ,126 2,445,405 2,445,405 2,445, ,279, ,457, ,653,269 48,514,989 49,057,022 25,457, ,941, ,500, ,200, ,996 18,626,743 Total - Non Current Assets 486,608, ,734, ,739,791 Current Liabilities Trade and Other Payables Current Portion of Long Term Borrowings Provisions 11,087,833 7,552,407 8,046,251 2,471,326 1,571,238 1,572,039 6,063,658 6,107,158 6,127,158 Total - Current Liabilities 19,622,817 15,230,803 15,745,448 Non Current Liabilities Long Term Borrowings Provisions - Non Current 17,816,593 17,743,300 20,966, , , ,531 Total - Non Current Liabilities 18,732,824 18,665,831 21,889,292 Equity Retained Surplus Reserves - Cash Backed Revaluation Surplus 141,346, ,072, ,664,723 25,834,023 24,423,203 51,506, ,613, ,613, ,613,737 Total - Equity 495,794, ,109, ,784,623 Page 29 of 42

30 Statement of Cash Flows

31 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Cash Flows from Operating Activities Receipts - Operating Rates 40,262,727 40,352,794 42,486,764 Operating Grants Subsidies and Contributions 4,748,186 4,397,433 5,015,250 Fees and Charges Service Charges Interest Earnings 24,861,240 1,554,045 24,973,960 1,837,684 25,525,100 1,834,045 Goods and Services Tax 265,000 Other Revenue 198, , ,950 71,624,490 72,341,591 75,597,109 Payments - Operating Employee Costs (36,987,338) (35,462,657) (37,384,145) Materials and Contracts (25,353,795) (25,918,574) (26,290,138) Utility Charges (1,720,066) (1,618,104) (2,318,765) Interest Expenses (806,768) (806,768) (685,000) Insurance Expenses (847,718) (776,023) (753,470) Goods and Services Tax (250,000) Other (2,003,704) (5,917,995) (3,233,869) (67,719,389) (70,750,121) (70,665,387) Net cash provided by (used in) operating activities 3,905,101 1,591,470 4,931,722 Cash Flows from Investing Activities Receipts - Investing Non Operating Grants Subsidies and Contributions 4,161,531 2,286,834 4,109,287 Proceeds from Asset Sales 32,579, ,848 31,852,000 36,741,131 2,982,682 35,961,287 Payments - Investing Payments for the Acquisition of Assets (25,079,521) (11,567,899) (18,709,739) (25,079,521) (11,567,899) (18,709,739) Net cash provided by (used in) investing activities 11,661,610 (8,585,217) 17,251,548 Cash Flows from Financing Activities Receipts - Financing Proceeds - New Debentures 8,909,000 1,209,000 4,795,500 Proceeds - Self Supporting Loans 211, ,334 54,168 9,120,333 1,420,334 4,849,668 Payments - Financing Repayment of Debentures (2,471,326) (2,182,381) (1,571,238) (2,471,326) (2,182,381) (1,571,238) Net cash provided by (used in) financing activities 6,649,007 (762,047) 3,278,430 Net increase (decrease) in cash held Cash at the beginning of year 45,008,107 45,008,107 37,252,313 Cash and cash equivalents at the end of the year 67,223,825 37,252,313 62,714,013 Page 31 of 42

32 Cash Backed Reserves

33 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Cantonment Hill Master Plan Reserve Reserve Purpose: To fund capital works at Cantonment Hill in accordance with the Catonment Hill Master Plan. Source of : Transfer from the Investment Reserve as approved by Council. Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review Opening Balance 1,712,227 1,712,227 1,439,884 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (1,707,185) (272,343) (1,264,800) Closing Balance 5,042 1,439, ,084 Fremantle Markets Conservation Reserve Reserve Purpose: To fund conservation works to the Fremantle Markets Source of : Contribution by lessee on signing of new lease in June Increase of rent derived from the premises for the first ten years of the lease commencing in June 2008 as a minimum to assit in obtaining external funding for implementing the Conservation Plan. Opening Balance 199, , ,581 Transfer to Reserves (Based on Operating Surplus) 159, , ,135 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (113,113) (33,000) Transfer from Reserves (Loan Principal Repayments) (113,113) (115,000) Closing Balance 245, , ,716 Fremantle Town Hall Refurbishment Reserve Reserve Purpose: To provide funds for major refurbishment of the historic Fremantle Town Hall. Source of : Transfer from the Investment Reserve as approved by Council. Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review. Opening Balance 2,000,000 2,000,000 1,600,000 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (1,622,500) (400,000) (1,600,000) Closing Balance 377,500 1,600,000 0 Page 33 of 42

34 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 HACC Asset Replacement Reserve Reserve Purpose: To fund capital acquisitions for the Home and Community Care(HACC)program. Source of : Transfer from the cash operating surplus of Home and Community Care (HACC) program as agreed by funding agency. Opening Balance 76,545 76,545 76,545 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) Closing Balance 76,545 76,545 76,545 Heritage Places Reserve Reserve Purpose: To finance the major upgrading and maintenance (including painting) to the Fremantle Town Hall. Conserve heritage places already owned or vested in the Council. Augment external funds allocated to the City for the purpose of heritage conservation. Provide assiatnce to other owners of heritage places within the municipality where Council is satisfied that this is a proper, cost effective and lawful use of the funds. To administer conservation funds appeals. To finance the additional costs of higher specified infrastructure improvements (e.g. footpaths, roads, landscaping, buildings, etc) to areas abutting or adjacent to heritage places where the higher specifications are incurred to maintain the area in sympathy with the heritage place. Purchase heritae properties within the municipality of fremantle which are in a distinct need of conservation, Council can conserve according to the Burra Charter principles, enable Council to demonstrate the Burra Charter model of conservation for other to follow or in Council's estimation would otherwise be conserved (restored) in accordance with Burra Charter principles. Finance major renewal, restoration or maintenance of heritage properties. Council Policy SG30 HEritage Places Reserves also refers. Source of : Municipal Fund contribution as approved by Council in the annual budget. Net proceeds from sale of properties whose initial acquisition and restoration was financed from this reserve. Opening Balance 105, ,241 17,272 Transfer to Reserves (Based on Operating Surplus) 495, , ,125 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (619,787) (583,149) (540,000) Closing Balance (19,366) 17, Page 34 of 42

35 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Investment Fund Reserve Reserve Purpose: To realise and make investments in income producing assets. A specified list of investment properties forms part of the investments. Funds will not be withdrawn from the reserve to subsidise operating or recurrent expenditure, nor shall funds be withdrawn for the purpose of providing community facilities that do not provide a commercial rate of return, unless specifically decided otherwise by the Council. Source of : Net proceeds of sale of nominated freehold properties, unless otherwise resolved by Council. Net proceeds from sale of miscellaneous parcels of land, unless otherwise resolved by Council. Transfer from municipal fund of principal repayment equivalent for Loan 189 (Queensgate) that was paid out in January 2006 using funds from the Investment Reserve. Net proceeds from the winding up of the City of Fremantle Trust Fund as per the City of Fremantle and Town of East Fremantle Trust Funds (Amendment and Expiry) Bill Opening Balance 10,068,870 10,068,870 9,396,979 Transfer to Reserves (Based on Operating Surplus) 31,700,000 Transfer to Reserves (Specified Amount) 32,430,000 Transfer from Reserves (Operating and Capital Projects) (1,616,500) (671,891) (1,755,000) Closing Balance 40,152,370 9,396,979 40,071,979 Kings Square Improvements Reserve Reserve Purpose: To fund capital improvements to Kings Square. Source of : Transfer from the Investment Reserve as approved by Council. Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review Opening Balance 1,356,522 1,356,522 1,356,522 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (75,000) Closing Balance 1,356,522 1,356,522 1,281,522 Page 35 of 42

36 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Leighton Precinct Maintenance Reserve Reserve Purpose: To hold any specified area rate income raised during the financial year taht were unspent at 30 June in relation to Leighton Precinct maintenance. To fund the above normal costs associated with maintaining the higher standard of the landscaping of the Leighton residential area. Source of : Revenue raised from a specified area rate that was unspent at the end of the financial year. Opening Balance 144, , ,319 Transfer to Reserves (Based on Operating Surplus) 38,001 40,000 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (20,570) Closing Balance 144, , ,319 Leisure Centre Upgrade Reserve Reserve Purpose: To provide funds for major upgrading and refurbishment works at the Fremantle Leisure Centre. Source of : Transfer from the Investment Reserve as approved by Council. Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review. Opening Balance 150, , ,000 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (27,500) Closing Balance 150, , ,500 Page 36 of 42

37 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Parking Dividend Equalisation Reserve Reserve Purpose: To provide a smoothing out of revenue contributions to municipal operations from commercial parking activities. That is to be achieved as follows (a) by transferring net profits in excess of budget to the reserve and (b) if required, when there is a material (i.e. plus 1%) net loss, transferring funds from the reserve to municipal fund to compensate the loss. Fund commercial parking capital equipment and facilities or parking infringement capital equipment and facilities to the extent the funds available in the reserve exceed 2.5% of budgetted gross parking revenue. Source of : Transfer from the Municipal Fund (a) net profit on commercial parking operations exceeding a set figure in the budget. Note: Net profit is calculated including depreciation and allocated support service costs but excludes capital. and/or (b) Transfer from the Municipal Fund amounts determined by Council through the annual budget or budget review in relation to parking operations. Transfer from Municipal Fund amounts determined by Council through the annual budget or budget review in relation to parking infringement operatons. Net proceeds from sale of parking facilities as determined by Council through the annual budget or budget review. Opening Balance 6,913,281 6,913,281 7,392,275 Transfer to Reserves (Based on Operating Surplus) 500, ,000 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (370,000) (21,006) (744,000) Closing Balance 7,043,281 7,392,275 6,648,275 Parks Recreation and Facilities Reserve Reserve Purpose: To fund improvements within the South Fremantle Tip Site Reserve. To Finance improvements within the Kings Square Reserve. To Finance tourism projects within the City. To finance facilities for sporting clubs on a self supporting loan basis in accordance with Council guidelines for such advances to clubs. To Finance improvements within the Port and Leighton Beach Reserve. To finance capital works and improvements at Fremantle Oval. To Finance improvements or major refurbishments to other parks and recreation facilities within the municipality. Source of : Municipal Fund contribution as approved by Council in the annual budget. Opening Balance 767, , ,236 Transfer to Reserves (Based on Operating Surplus) 41,962 3,961 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (1,170,650) (510,650) (260,000) Closing Balance (360,763) 261,236 1,236 Page 37 of 42

38 Annual Thursday, 23 June, 2016 Original 2015/16 Current Forecast 2015/16 Renewable Energy Investment Reserve Reserve Purpose: To purchase sufficient carbon offsets to maintain the City's carbon neutral status. Remaining funds will then be used to invest in projects that promote positive renewable energy outcomes. If no renewable energy projects can be identified, the fund will accumulate that year's contribution. Source of : Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review. Opening Balance 338, , ,590 Transfer to Reserves (Based on Operating Surplus) 396, , ,500 Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) (393,782) (410,519) (73,500) Closing Balance 341, , ,590 Stan Reilly Property Redevelopment Reserve Reserve Purpose: To fund capital works for the development of the Stan Reilly site. Source of : Transfer from the Investment Reserve as approved by Council. Transfer from Municipal Fund amounts determined by Council through the annual budget and budget review Opening Balance 2,000,000 2,000,000 2,000,000 Transfer to Reserves (Based on Operating Surplus) Transfer to Reserves (Specified Amount) Transfer from Reserves (Operating and Capital Projects) Closing Balance 2,000,000 2,000,000 2,000,000 Summary Opening Balance 25,834,023 25,834,023 24,423,203 Transfer to Reserves (Based on Operating Surplus) 33,292,421 1,592,421 1,140,760 Transfer to Reserves (Specified Amount) 32,430,000 Transfer from Reserves (Operating and Capital Projects) (7,613,517) (2,890,128) (6,372,800) Transfer from Reserves (Loan Principal Repayments) (113,113) (115,000) Closing Balance 51,512,927 24,423,203 51,506,163 Page 38 of 42

39 Projects Funded from Reserves

40 Annual Thursday, 23 June, 2016 City of Fremantle Draft - Projects Funded from Reserves 16/17 Reserve Investment Fund Capital Project Project Project Project Project Project Install compliant lift and stairs to Evan Davies building (stage 3) Prepare detailed design for Council offices (Freo 2029) Construct a new data center to facilitate the transition to the new depot and construction of a new administration building. Purchase Warders Cottage Undertake land swap with State Government for Warders Cottage W1 Rear Yards Make an unsolicited bid for Lot 52 Kings Square $270,000 $500,000 $145,000 $800,000 $20,000 $20,000 $1,755,000 Reserve Heritage Places Capital Project Project Undertake external conservation works to Fremantle Town Hall Upgrade Old Fire Station building $340,000 $200,000 $540,000 Reserve Parking Dividend Equalisation Capital Project Project Replace parking modems supported by 3G network Install new parking meters on Marine Terrace $384,000 $360,000 $744,000 Reserve Parks Recreation and Facilities Operating Project Project Capital Project Project Prepare concept design for pocket park Hilton (Green Plan 2020) Prepare concept design for pocket park O'Connor (Green Plan 2020) Prepare detailed design for the redevelopment of Fremantle Park Replace Esplanade Park bore $15,000 $15,000 $60,000 $170,000 $260,000 Reserve Kings Square Improvements Operating Project Prepare concept design for Kings Square Public Realm upgrade (Freo 2029) $75,000 $75,000 Page 40 of 42

41 Annual Thursday, 23 June, 2016 City of Fremantle Draft - Projects Funded from Reserves 16/17 Reserve Fremantle Markets Conservation Capital Project Replace ceiling at Stall 16 Fremantle Markets $33,000 $33,000 Reserve Renewable Energy Investment Operating Project Project Project Project Capital Project Review Climate Change Adaptation Plan (One Planet) Review and integrate Tech1 and GreensenseVIEW (One Planet) Prepare an energy plan for the City (One Planet) Conduct smart LED streetlighting trial (One Planet) Upgrade City owned public lighting to LED or sustainable technologies (One Planet) $2,500 $10,000 $50,000 $1,000 $10,000 $73,500 Reserve Leisure Centre Upgrade Capital Project Replace change room building roof at Fremantle Leisure Centre $27,500 $27,500 Reserve Fremantle Town Hall Refurbishment Capital Project Undertake external conservation works to Fremantle Town Hall $1,600,000 $1,600,000 Reserve Cantonment Hill Master Plan Operating Project Capital Project Project Project Project Landscape Recreation Reserve (soft) - Cantonment Hill (stage 1) Refurbish Cantonment Hill Naval Store to heritage standards and public access requirements Install structures - Cantonment Hill (stage 1) Install paths - Cantonment Hill (stage 1) Install irrigation system - Cantonment Hill (stage 1) $55,500 $680,000 $292,200 $103,400 $133,700 $1,264,800 Total number of projects: 27 $6,372,800 Page 41 of 42

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43 Annual Notes to and forming part of the budget

44 Annual Table of Contents Notes forming to and part of the budget Page 1. Significant Accounting Policies 3 2. Reporting Program Descriptions Auditors Remuneration Deprecaition of Non Current Assets by Program Deprecaition of Non Current Assets by Class Interest Interest Expense Fees and Charges Revenue Elected Member Remuneration Reconcilliation of Cash and Reserves Reconciliation of Net Cash Provided by Operating Activities Undrawn Borrowings Facilities Disposal of Assets by Class Disposal of Assets by Program Information on Loan Borrowings Rating and Valuation Information Objectives and Reasons for Differential Rates Rate Payment Discounts, Wavers and Concessions Specified Area Rates Service Charges Interest Charges and Instalments - Rates Major Land Transactions Trading Undertakings and Major Trading Undertakings Loan Advances Restricted Contributions Trust Funds Capital Projects Operating Projects Base Operating Activities 60

45 Significant Accounting Policies The significant accounting policies which have been adopted in the preparation of this financial report are: Basis of Preparation The budget has been prepared in accordance with applicable Australian Accounting Standards (as they apply to local government and not-for-profit entities), Australian Accounting Interpretations, other authorative pronouncements of the Australian Accounting Standards Board, the Local Government Act 1995 and accompanying regulations. Material accounting policies which have been adopted in the preparation of this budget are presented below and have been consistently applied unless stated otherwise. Except for cash flow and rate setting information, the budget has also been prepared on the accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and liabilities. The Local Government Reporting Entity All Funds through which the Council controls resources to carry on its functions have been included in the financial statements forming part of this budget. In the process of reporting on the local government as a single unit, all transactions and balances between those Funds (for example, loans and transfers between Funds) have been eliminated. All monies held in the Trust Fund are excluded from the financial statements. A separate statement of those monies appears at page 25 of this budget document. 2015/16 Current Forecast Balances Balances shown in this budget as 2015/16 Current Forecast are as forecast at the time of budget preparation and are subject to final adjustments. Rounding Off Figures All figures shown in this budget, other than a rate in the dollar, are rounded to the nearest dollar. Rates, Grants, Donations and Other Contributions Rates, grants, donations and other contributions are recognised as revenues when the local government obtains control over the assets comprising the contributions. Control over assets acquired from rates is obtained at the commencement of the rating period or, where earlier, upon receipt of the rates. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with receivables or payables in the statement of financial position. Cash flows are presented on a Gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows. Superannuation The Council contributes to a number of Superannuation Funds on behalf of employees. All funds to which the Council contributes are defined contribution plans. Page 3 of 105

46 Significant Accounting Policies - Continued Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash at bank, deposits available on demand with banks, and other short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown as short term borrowings in current liabilities in the statement of financial position. Trade and Other Receivables Trade and other receivables include amounts due from ratepayers for unpaid rates and service charges and other amounts due from third parties for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets. Collectability of trade and other receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that they will not be collectible. Inventories General Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Land Held for Sale Land held for development and sale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing costs and holding costs until completion of development. Finance costs and holding charges incurred after development is completed are expensed. Gains and losses are recognised in profit or loss at the time of signing an unconditional contract of sale if significant risks and rewards, and effective control over the land, are passed on to the buyer at this point. Land held for sale is classified as current except where it is held as non-current based on Council s intentions to release for sale. Fixed Assets Each class of fixed assets within either property, plant and equipment or infrastructure, is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Mandatory Requirement to Revalue Non-Current Assets Effective from 1 July 2012, the Local Government (Financial Management) Regulations were amended and the measurement of non-current assets at Fair Value became mandatory. The amendments allow for a phasing in of fair value in relation to fixed assets over three years as follows: (a) for the financial year ending on 30 June 2013, the fair value of all of the assets of the local government that are plant and equipment; and Page 4 of 105